A SENIOR Bank of Scotland figure was among those caught up last night in the unfolding IRA money-laundering investigation sweeping across the Irish Republic.
Phil Flynn, who is an Irish government adviser, stepped down from a number of key positions including his role as non-executive chairman of Bank of Scotland in Ireland.
His resignation came after the owner of a finance company of which Mr Flynn is a non- executive director was arrested by police investigating a money-laundering operation and the origins of almost 2.5 million in cash that was seized.
Last night Mr Flynn, 61, said: "I have no involvement with money-laundering, full stop - for the Republican movement or for anybody else. The sensible thing is to step aside. This will sort itself out and when it does you’ll see me back."
Mr Flynn’s home and office were raided by detectives after it emerged that he was a non-executive director of Chesterton Finance, which is being investigated by Gardai.
He said last night: "I don’t believe that the money has been laundered through Chesterton."
His decision came as police launched an unprecedented security operation to bust the laundering operation as investigations continued into possible links between the cash seized by police and the 26.5 million Northern Bank heist.
With the Sinn Fein leadership facing its biggest crisis since the peace process began, senior Gardai officers believe vast amounts of cash have been hidden throughout the country and overseas.
As events moved quickly last night, money that may be linked to the Northern Bank robbery was found at a sports complex used by police in Belfast.
Police were unable to say immediately what bearing the discovery had on the investigation, which they described yesterday as a "very fluid situation".
More than 100 detectives are involved in a growing inquiry that could run for months in an attempt to identify everyone linked to a crime the scale of which has astonished the Irish government.
Computers and dozens of documents have been seized in a series of raids on homes and other properties in Londonderry, Dublin, Cork, Dundalk, Co Louth and Co Offaly. In one operation, 17 sackfuls of cash were removed from the home of a Co Cork businessman.
Four people, including a top businessman and at least one Sinn Fein member, were still being questioned last night.
A fifth man, a chef from Cork, who was arrested as part of the inquiry when almost ||EURO||100,000 (69,000) was allegedly discovered hidden in an empty detergent box in a Jeep, has been charged with IRA membership. Two men were released without charge.
Gardai Commissioner Noel Conroy confirmed his officers were investigating IRA links.
He said that one of those arrested was involved in Sinn Fein.
About 26.5 million was stolen from the Northern Bank in Belfast on 20 December in a raid that has been blamed on the Provisional IRA. But the IRA and Sinn Fein have denied involvement. Mr Adams stood by his party’s denials yesterday.
The West Belfast MP, who is preparing to return to Ireland from Spain, said: "I have asked for a full report from our party head office, so I can deal with this when I return," he said. "I think people have to be very measured.
"As we speak I have no reason to change what I have said publicly. But let’s be clear, Sinn Fein will not run away from our responsibilities on any of these matters."
Mark Durkan, leader of the nationalist SDLP, said the situation vindicated his view that the provisional movement was running a structured criminal enterprise.
was appointed by Bertie Ahern to plan the decentralisation of more than 10,000 civil and public servants in Dublin in 2003. Last night a spokesman for the Bank of Scotland (Ireland) said Mr Flynn’s resignation had been accepted.
He said: "Mr Flynn has stepped down as Bank of Scotland chairman today. He felt that under the present circumstances he could no longer continue as chairman and it was felt this was in the best interests of the bank.
"He is better known in Ireland as an industrial troubleshooter than for being the chairman of the Bank of Scotland over here."
Mr Flynn has been head of the state-owned ICC bank since 1996, which was acquired by the Bank of Scotland in 2001. Mr Flynn then became non-executive chairman of the merged group.